Bombay High Court
Sanjay Kakade vs Vistra Itcl (India) Ltd. And 3 Ors on 14 December, 2024
Author: M.S.Sonak
Bench: M.S.Sonak
comap.542-2019, comap.29-2020 & comap.22-
2024:BHC-OS:20617-DB 2023(F).docx
Pradnya
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL APPEAL NO. 542 OF 2019
IN
JUDGE'S ORDER NO. 74 OF 2017
IN
COMMERCIAL EXECUTION APPLICATION (L) NO. 31 OF 2017
Usha Kakade, ]
Indian inhabitant, R/at Kakade ]
Paradise, 55/11A, Law College Road ]
Pune 411004 ] ...Appellant
[Orig.Respondent
No.2/Judgment
Debtor]
VERSUS
1. Vistra ITCL (India) Ltd., ]
(formerly known as "IL&FS Trust ]
Company Limited"), a company ]
incorporated under the Companies]
Act, 1956, Having its registered ]
office at IL&FS Financial Centre, ]
Plot No.C-22, G Block, ]
Bandra (East), Mumbai 51 ]
Being the trustee of the ]
Infrastructure Leasing & Financial ]
Services Realty Fund, a scheme of ]
IL&FS Private Equity Trust, a SEBI ]
Registered Venture Capital Fund, ]
Through its investment manager ]
IL&FS Investment Managers Ltd., ]
A company incorporated under the]
Companies Act, 1956, having its ]
Registered office at IL&FS ]
Financial Centre, Plot No.C-22, ]
G Block, Bandra (East), ]
Mumbai 51 ]
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2. IIRF Holdings III Limited, ]
a company incorporated in ]
Mauritius as a company limited ]
by shares, having its registered ]
office at C/o International ]
Financial Services Limited, ]
IFS Court, 28, Cybercity Ebene, ]
Mauritius ]
3. Kakade Construction Company ]
Pvt. Ltd., ]
A company incorporated under the]
Companies Act, 1956, having its ]
Registered office at Kakade Capital]
1205, Shirole Road, Pune 411005 ]
Through its Director, ]
Mr Ashok Yadav, ]
4. Mr. Sanjay Kakade ]
Indian inhabitant, R/at Kakade ]
Paradise, 55/11A, Law College ]
Road, Pune 411 004 ] ...Respondents
[R1 & R2 are Orig.
Applicants/Decree
Holders]
[R3 & R4 are Orig.
Respondent Nos.3 &
1/Judgment
Debtors]
WITH
COMMERCIAL APPEAL NO. 29 OF 2020
IN
JUDGE'S ORDER NO. 74 OF 2017
IN
COMMERCIAL EXECUTION APPLICATION (L) NO. 31 OF 2017
Sanjay Kakade, ]
Indian inhabitant, R/at Kakade ]
Paradise, 55/11A, Law College Road ]
Pune 411004 ] ...Appellant
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[Orig.Respondent
No.1/Judgment
Debtor]
VERSUS
1. Vistra ITCL (India) Ltd., ]
(formerly known as "IL&FS Trust ]
Company Limited"), a company ]
incorporated under the Companies]
Act, 1956, Having its registered ]
office at IL&FS Financial Centre, ]
Plot No.C-22, G Block, ]
Bandra (East), Mumbai 51 ]
Being the trustee of the ]
Infrastructure Leasing & Financial ]
Services Realty Fund, a scheme of ]
IL&FS Private Equity Trust, a SEBI ]
Registered Venture Capital Fund, ]
Through its investment manager ]
IL&FS Investment Managers Ltd., ]
A company incorporated under the]
Companies Act, 1956, having its ]
Registered office at IL&FS ]
Financial Centre, Plot No.C-22, ]
G Block, Bandra (East), ]
Mumbai 51 ]
2. IIRF Holdings III Limited, ]
a company incorporated in ]
Mauritius as a company limited ]
by shares, having its registered ]
office at C/o International ]
Financial Services Limited, ]
IFS Court, 28, Cybercity Ebene, ]
Mauritius ]
3. Kakade Construction Company ]
Pvt. Ltd., ]
A company incorporated under the]
Companies Act, 1956, having its ]
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Registered office at Kakade Capital]
1205, Shirole Road, Pune 411005 ]
Through its Director, ]
Mr Ashok Yadav, ]
4. Mr. Sanjay Kakade ]
Indian inhabitant, R/at Kakade ]
Paradise, 55/11A, Law College ]
Road, Pune 411 004 ] ...Respondents
[R1 & R2 are Orig.
Applicants/Decree
Holders]
[R3 & R4 are Orig.
Respondent Nos.3 &
1/Judgment
Debtors]
WITH
COMMERCIAL APPEAL NO. 22 OF 2023
IN
JUDGE'S ORDER NO. 74 OF 2017
IN
COMMERCIAL EXECUTION APPLICATION (L) NO. 31 OF 2017
Kakade Construction Company Pvt. Ltd.,]
A company incorporated under the ]
Companies Act, 1956, having its ]
Registered office at Kakade Capital ]
1205, Shirole Road, Pune 411005 ]
Through its Director, ]
Mr Ashok Yadav ] ...Appellant
[Orig.Respondent
No.3/Judgment
Debtor]
VERSUS
1. Vistra ITCL (India) Ltd., ]
(formerly known as "IL&FS Trust ]
Company Limited"), a company ]
incorporated under the Companies]
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Act, 1956, Having its registered ]
office at IL&FS Financial Centre, ]
Plot No.C-22, G Block, ]
Bandra (East), Mumbai 51 ]
Being the trustee of the ]
Infrastructure Leasing & Financial ]
Services Realty Fund, a scheme of ]
IL&FS Private Equity Trust, a SEBI ]
Registered Venture Capital Fund, ]
Through its investment manager ]
IL&FS Investment Managers Ltd., ]
A company incorporated under the]
Companies Act, 1956, having its ]
Registered office at IL&FS ]
Financial Centre, Plot No.C-22, ]
G Block, Bandra (East), ]
Mumbai 51 ]
2. IIRF Holdings III Limited, ]
a company incorporated in ]
Mauritius as a company limited ]
by shares, having its registered ]
office at C/o International ]
Financial Services Limited, ]
IFS Court, 28, Cybercity Ebene, ]
Mauritius ]
3. Mr. Sanjay Kakade ]
Indian inhabitant, R/at Kakade ]
Paradise, 55/11A, Law College ]
Road, Pune 411004 ]
4. Mrs. Usha Kakade ]
Indian inhabitant, R/at Kakade ]
Paradise, 55/11A, Law College ]
Road, Pune 411 004 ] ...Respondents
[R1 & R2 are Orig.
Applicants/Decree
Holders]
[R3 & R4 are Orig.
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Respondent Nos.1 &
2/Judgment
Debtors]
__________________________________________________________
A PPEARANCES -
Mr P. Chidambaram, Senior Advocate, a/w Navroz Seervai,
Senior Advocate, Pushpa Ganediwala, Shivaji Jadhav,
Karan Bhosale, Neha Bhosale, Laveena Tejwani, Anuja
Divadkar, Abdul Basit Kudalkar, Dhwani Mehta, Disha
Parekh, Madhura Shah, Yash Jadhav, Yashwant Singh,
Shivangi, Anshu Agarwal, Ankit Rathod i/b. NDB Law
for the appellants in COMAP/542/2019 and
COMAP/29/2020.
Mr Karan Bhosale, a/w Neha Bhosale, Laveena Tejwani, Anuja
Divadkar, Abdul Basit Kudalkar, Dhwani Mehta, Disha
Parekh, Madhura Shah, Yash Jadhav, Yashwant Singh,
Shivangi, i/b. NDB Law for the appellants in
COMAP/22/2023.
Mr Aspi Chinoy, Senior Advocate, Jatin Pore, Ashwini
Hariharan and Vishal Mandal i/b. DSK Legal for the
Respondent Nos.1 and 2 in COMAP/542/2019.
Mr Gaurav Joshi, Senior Advocate, Jatin Pore, Ashwini
Hariharan and Vishal Mandal i/b. DSK Legal for
Respondent Nos.1 and 2 in COMAP/29/2020 and
COMAP/22/2023.
Mr N. C. Pawar (O.S.D.) and Mr Gajanan G. Surve, Master
(Adm.) from Court Receiver Officer present.
__________________________________________________________
CORAM : M.S.Sonak &
Jitendra Jain, JJ.
RESERVED ON : 06 December 2024
PRONOUNCED ON : 14 December 2024
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JUDGMENT (Per MS Sonak J):
–
1. Heard learned counsel for the parties.
2. These are appeals against what the appellants style, “the
impugned judgment and order dated 22.02.2018 passed by the
learned Single Judge of this Hon’ble Court in purported exercise
of powers referable to Order XXI Rule 2, purportedly recording
satisfaction of the Arbitral Award dated 14.07.2014 by way of
Consent Terms dated 22.02.2018 ……………”.
3. On 18 June 2018, when these appeals were taken up for
admission, a preliminary objection was raised about their
maintainability. A Coordinate Bench of this Court admitted
these appeals “only to address the issue in respect of
maintainability of appeals as stated above”. Interim relief was,
however, declined.
4. Since interim relief was declined, the Respondents’
execution proceedings before the learned Single Judge
proceeded. By order dated 24 August 2018, a learned Single
Judge appointed a Receiver regarding some of the disputed
lands.
5. The appellants filed Commercial Appeal (L) No.109 of
2019 and connected appeals against the learned Single
Judge’s order dated 24 August 2018. Again, the Respondents
objected to the maintainability of such appeals. By a detailed
judgment and order dated 9 August 2019, a Coordinate Bench
dismissed the appeals as not maintainable.
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6. At the final hearing of these appeals, again, arguments
were heard on the maintainability of these appeals, which is
the main issue before us at this stage.
APPELLANTS CONTENTIONS
7. Mr P. Chidambaram, learned Senior Advocate for the
appellants, submitted that the Executing Court, which made
the impugned judgment and order dated 22 February 2018,
was a Commercial Court within the meaning of Section 13
read with Section 2(b) of the Commercial Courts Act, 2015
[CCA] Therefore, these appeals would be maintainable under
Section 13, including Section 13 (1A) of the CCA.
8. Mr P. Chidambaram submitted that the central portion of
Section 13(1A) provides for an appeal against a judgment or
order. The proviso to Section 13(1A), advisedly refers not to
the expression “judgment or order” but only to “orders”. He,
therefore, submitted that the restriction, if at all, under the
proviso to Section 13(1A), would not apply in case of
“judgment”. He submitted that even though a “judgment” may
not constitute an order specifically enumerated under Order
XLIII of CPC as amended by the CCA and Section 37 of the
Arbitration and Conciliation Act, 1996 [ACA], an appeal
would still lie against the “judgment” under the central
provision of Section 13(1A) of the CCA. He relied upon D &
H India Ltd. vs. Superon Schweisstechnik India Ltd. 1,
Hubtown Limited vs. IDBI Trusteeship Service Limited2 and
1
2020 SCC On Line Del 477
2
2016 SCC OnLine Bom 9019
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Sigmarq Technologies Pvt. Ltd. and others vs. Manugrah India
Limited and others3 in support of his contentions.
9. Mr P. Chidambaram finally submitted that should this
Court, for any reason, conclude that these appeals are not
maintainable, then the appellants should be granted liberty to
approach the Court, which made the impugned judgment and
order dated 22 February 2018 with a request to modify/revise
the said judgment and order on the ground that the
compromise terms are contrary to the law i.e. Foreign
Exchange Management Act, 1999 (FEMA). He relied on
Banwari Lal vs. Chando Devi and another 4 and Vipan
Aggarwal and another vs. Raman Gandotra and others 5 to
support this contention.
RESPONDENTS CONTENTIONS
10. Mr Chinoy, learned Senior Advocate for the first and
second respondents, submitted that the issue of
maintainability of these appeals stands concluded against the
appellants by the detailed judgment and order dated 9 August
2019 in Commercial Appeal (L) No.109 of 2019 and
connected appeals involving the same parties and in the same
execution proceedings. He submitted that this judgment and
order dated 9 August 2019 operates as res judicata, and based
upon the same, even these appeals must be dismissed as not
maintainable. He submitted that the principle of res judicata
applies at two different stages of the same proceedings.
3
2017 SCC OnLine Bom 9191
4
(1993) 1 SCC 581
5
(2023) 10 SCC 529
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11. Without prejudice, Mr Chinoy submitted that the
proceedings for enforcement of the arbitral award were not
proceedings under the CPC or the CCA but under the ACA.
He, therefore, submitted that the issue of appealability had to
be determined by reference to the provisions of the ACA,
particularly Section 37 of the ACA and not by any of the
provisions of the CPC or the CCA. He submitted that the later
two enactments only provided the forum of appeal. He relied
upon Jet Airways (India) Limited and another vs. Mr Subrata
Roy Sahara and others6, Vikram V. Vyas and others vs.
Madhusudan G. Vyas and others7, Shailendra Bhadauria and
others vs. Matrix Partners India Investment Holdings LLC and
others8, Kandla Export Corporation and another vs. OCI
Corporation and another9, BGS SGS SOMA JV vs. NHPC
Limited10 and Government of India vs. Vedanta Limited and
others11 to support his contentions.
12. For all the above reasons, Mr Chinoy submitted that
these appeals may be dismissed as not maintainable.
APPELLANTS REJOINDER
13. Mr Seervai, by way of rejoinder, submitted that the
principle of res judicata does not bar the raising of pure
questions of law because there could never be any estoppel
6
2012 (2) AIR Bom R 855
7
2016 SCC OnLine Bom 12709
8
2018 SCC OnLine Bom 13804
9
(2018) 14 SCC 715
10
(2020) 4 SCC 234
11
(2020) 10 SCC 1
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against the law. He relied on Canara Bank vs. N. G. Subbaraya
Setty and another12.
14. Mr Seervai submitted that the decision in Kandla
(supra) was distinguishable and restricted only to Part II of
the ACA, particularly Sections 49 and 50 of the ACA. He
submitted that there was a vast difference between the
provisions, the scope and the scheme of Part I and Part II of
the Arbitration Act, as was explained by the Hon’ble Supreme
Court in Fuerst Day Lawson Limited vs. Jindal Exports
Limited13.
THE EVALUATION OF THE RIVAL CONTENTIONS
15. The rival contentions now fall for our determination.
16. The genesis of these appeals is the disputes between
Kakade Construction Company Pvt. Ltd. (appellant), Vistra
ITCL (India) Ltd. (formerly known as “IL&FS Trust Company
Limited”) (R-1) and IIRF Holdings III Limited (R-2)
concerning certain agreements entered by these parties. These
disputes were referred to an Arbitral Tribunal in June 2011.
17. The Arbitral Tribunal made a consent award dated 14
July 2014, under which R-1 and R-2 agreed to accept a
reduced amount of Rs.178 crores with interest from the
appellants. However, since the appellants refused to make any
payments under the consent award, R-1 and R-2 applied
Section 36 of the ACA to enforce the consent award, seeking
to recover an amount of Rs.276.73 crores from the appellants.
A Chamber Summons (L) No.137 of 2017 was taken out in
12
(2018) 16 SCC 228
13
(2011) 8 SCC 333
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these proceedings to appoint a Court Receiver in respect of
the lands specified in the Chamber Summons.
18. The appellants objected to the enforcement and
execution of the consent award dated 14 July 2014, alleging
that it violated the provisions of FEMA. However, in these
enforcement/execution proceedings, the parties once again
filed consent terms, based on which the learned Single Judge
of this Court (Executing/Enforcement Court) made the
impugned order dated 22 February 2018. Under this order, R-
1 and R-2 extended further concessions to the appellants.
19. Without complying with any of the directions in the
impugned order dated 22 February 2018, the appellants
instituted these appeals, alleging that even the consent terms
in the execution/enforcement proceedings before the learned
Single Judge violated FEMA provisions.
20. As noted earlier, the order dated 18 June 2018 admitted
these appeals “only to address the issue in respect of
maintainability of appeals as stated above.” However, since no
interim relief was granted to the appellants while admitting
these appeals, the respondents’ execution proceedings before
the learned Single Judge proceeded. By order dated 24
August 2018, the learned Single Judge appointed a Receiver
for some of the disputed lands.
21. Against the order dated 24 August 2018 appointing a
Court Receiver in the execution proceedings, the appellants
instituted Commercial Appeal (L) No.109 of 2019 and
connected appeals. Again, the respondents objected to the
maintainability of such appeals.
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22. By a detailed judgment and order dated 9 August 2019,
the Coordinate Bench comprising Pradeep Nandrajog, C.J. and
Nitin Jamdar, J. dismissed Commercial Appeal (L) No.109 of
2019 and connected appeals as not maintainable. The
judgment and order dated 9 August 2019 have attained
finality because though it was attempted to be appealed, the
Special Leave Petition against the same was withdrawn
unconditionally by the appellants.
MAIN ISSUES FOR DETERMINATION
23. In these appeals as well, the issue of maintainability is
raised. Accordingly, in the context of maintainability of these
appeals, the following two issues arise: –
(a) Does the judgment and order dated 9 August 2019
made by the Coordinate Bench in Commercial Appeal
(L) No.109 of 2019 operate as res judicata, and, based
upon the same, will the present appeals have to be held
as not maintainable?
(b) Assuming that the principle of res judicata is not
attracted, still, whether these appeals are not
maintainable because they do not relate to any
proceedings or orders made under the CPC or the CCA,
but they relate to proceedings under the ACA which is
an exhaustive self-contained code?
RES JUDICATA OR PRINCIPLES ANALOGOUS TO RES
JUDICATA
24. As regards the objection based upon the doctrine of res
judicata, we note that this doctrine, having a very ancient
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history, embodies a rule of universal law and is a sum total of
public policy reflected in various maxims like ‘res judicata pro
veritate occipitur’, which means that a judicial decision must
be accepted as correct; and ‘nemo debet bis vexari pro una et
eadem causa’, which means that no man should be vexed
twice for the same cause. The doctrine of res judicata is not
technical, but it is a fundamental doctrine of all Courts that
there must be an end to litigation. This rule embodies a
principle of public policy, which, in turn, is an essential part of
the rule of law.14
25. This doctrine finds expression in Section 11 of CPC, but
it is well settled that Section 11 of CPC is not the foundation
of this doctrine but is merely the statutory recognition thereof.
Accordingly, Section 11 of CPC is not exhaustive of the
general doctrine of res judicata. This doctrine is founded on
equity, justice and good conscience.15 This principle of finality
of litigation is based on the high principle of public policy and
even the rule of law.16 In effect, the provision in Section 11 of
CPC or the doctrine of res judicata says that once a matter is
finally heard and decided between two parties, such a matter
will not be allowed to be re-agitated amongst the same parties
or the parties claiming under them. The earlier decision will
be final with respect to the matter so decided.
26. The Hon’ble Supreme Court has held that the principle
of res judicata would apply not only to two suits or
proceedings but also to two different stages in the same suit
14
S. Ramachandra Rao vs. S. Nagabhushana Rao and others, 2022 SCC OnLine SC
1460
15
Lal Chand (dead) by L.Rs. vs. Radha Krishan, (1977) 2 SCC 88
16
Daryao and others vs. State of U. P. and others, AIR 1961 SC 1457
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or proceedings. The Court held that even if the strict
parameters of Section 11 of CPC are not attracted, still,
principles analogous to res judicata or estoppel would still
apply. This position was made evident in Vijayabai and others
vs. Shriram Tukaram and others17, Y B Patil and others vs. Y L
Patil18, Prahlad Singh vs Col. Sukhdev Singh 19, Satyadhyan
Ghosal vs. Deorajin Debi20 and S. Ramachandra Rao (supra).
27. To sustain the plea of res judicata or principles
analogous to res judicata, respondents will have to establish
(i) That the parties in the former proceedings, i.e. the
proceedings which concluded with the judgment and order
dated 9 August 2019, were the same; (ii) The judgment and
order was made by a Court of competent jurisdiction; (iii) the
matter directly and substantially in issue in the former
proceedings is directly and substantially in issue in the present
proceedings, either actually or constructively; (iv) The matter
must have been finally decided as between the parties.
28. There is no dispute about the sameness of the parties or
the competence of the Court, at least in deciding whether it
had the jurisdiction to entertain the appeals before it. There is
also no dispute about the judgment and order dated 9 August
2019 attaining finality as between the parties. Admittedly, a
Special Leave Petition was instituted against the judgment and
order, but the same was unconditionally withdrawn.
29. On the crucial issue of the matter being directly and
substantially in issue in the former proceedings, the learned
17
(1999) 1 SCC 693
18
(1976) 4 SCC 66
19
(1987) 1 SCC 727
20
AIR 1960 SC 941
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counsel for the appellants submitted that the Commercial
Appeal (L) No.109 of 2019 and connected appeals were
against an “interim” order appointing a Court Receiver in the
execution/enforcement proceedings and the present appeals
are against a judgment and order dated 22 February 2018
“finally” disposing of the execution/enforcement proceedings.
On this basis, it was urged that the matter directly and
substantially in issue in the former proceedings differed from
the matters directly and substantially in issue in these
proceedings. In short, the judgment and order dated 9 August
2019 was sought to be distinguished on the ground that it was
in appeals directed against “interim” orders and the present
appeals were directed against “final” orders, even though both
were made in the very same proceedings seeking
execution/enforcement of the arbitral award dated 14 July
2014.
30. The locus classicus on the point of determining if an
issue was “directly and substantially” decided in the previous
suit or proceedings is the decision of the Hon’ble Supreme
Court in Sajjadanashin Sayed Md. B.E. Edr vs. Musa Dadabhai
Ummer and others21. Here, the Court held that if the matter
was in issue directly and substantially in a prior litigation and
decided against a party, the decision would be res judicata in a
subsequent proceeding. The expression “directly and
substantially” must be contrasted with “collaterally or
incidentally”. In paragraph 18, the Court referred to similar
tests (Mulla, 15th Edition, p.104). The Court quoted the
learned author: A matter in respect of which relief is claimed in
an earlier suit can be said to be generally a matter “directly and
21
(2000) 3 SCC 350
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substantially” in issue, but it does not mean that if the matter is
one in respect of which no relief is sought it is not directly or
substantially in issue. It may or may not be. The question arises
as to what the test is for deciding into which category the case
falls into. One test is that if the issue was “necessary” to be
decided for adjudicating on the principal issue and was decided,
it would have to be treated as “directly and substantially” in the
issue. If the judgment was, in fact, based upon that decision,
then it would be res judicata in a latter case.
31. The Court then held that the above summary in Mulla is
the correct statement of the law. In paragraph 19, the Court
adverted another principle of caution referred to by Mulla (P.
105): It is not to be assumed that the matters in respect to
which issues have been framed are all of them directly and
substantially in issue. Nor is there any special significance
attached to the fact that the particular issue is the first on the
list of issues. Which of the matters are directly in issue and
which, collaterally or incidentally, must be determined on the
facts of each case. A material test to be applied is whether the
Court considers the adjudication of the issue material and
essential for its decision.
32. On an exhaustive survey of the decisions about res
judicata, a Three Judge Bench of the Hon’ble Supreme Court
in Jamia Masjid vs. Sri K. V. Rudrappa and others22 held that
the twin test that is used for identification of whether an issue
has been conclusively decided in the previous suit is:
22
(2022) 9 SCC 225
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(A) Whether the adjudication of the issue was
‘necessary’ for deciding on the principal issue (‘the
necessity test’); and
(B) Whether the judgment in the suit is based
upon the decision on that issue (‘the essentiality
test’).
33. In the earlier Commercial Appeal or, for that matter, in
the present Commercial Appeals, the issue of the impugned
orders being interim, or final was entirely irrelevant. The
principal issue in the earlier and present appeals was not
whether an appeal lay against an interim order and not a final
one or vice versa. The principal issue involved in the earlier
and the present appeals was/is whether the proceedings for
execution or enforcement of an arbitral award could be
regarded as proceedings under the ACA or whether they were
proceedings under the CPC/CCA. That was the principal issue.
An adjudication on that issue was “necessary” for deciding the
principal issue. The judgment and order dated 9 August 2019
was based upon the decision on that principal issue. Thus,
applying the “necessity test” and the “essentiality test”, it is
apparent that the judgment and order dated 9 August 2019
has finally decided the principal issue, which was directly and
substantially involved in the earlier appeals by its judgment
and order dated 9 August 2019.
34. Incidentally, we must note that in Commercial Appeal
(L) No.109 of 2019 and connected appeals when the decision
of the Coordinate Bench of this Court in Jet Airways (supra)
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was cited, the appellants argued that Jet Airways was an
appeal concerning challenge to a final order disposing of
proceedings for execution or enforcement of an arbitral award
under Section 36 of the Arbitration Act. On that ground, the
Jet Airways (supra) decision was sought to be distinguished.
Now that the present appeals are against a similar order
disposing of proceedings for execution or enforcement of an
arbitral award under Section 36, the appellants urged that the
judgment and order dated 9 August 2019 will not apply
because the same concerned a challenge to an interim order.
By this logic, the appellants cannot object to the applicability
of the precedent in Jet Airways (supra) unless, of course, they
wish to persist in approbation and reprobation.
35. In any event, this distinction based upon the impugned
order in the appeal, being an interim order or a final order,
was considered and rejected in the former proceedings. This is
evident from paragraph 18 of the judgment and order dated 9
August 2019, which reads as follows: –
“18. The Appellants have sought to get over this position by
contending firstly that what was under consideration in the
case of Jet Airways, was the final order passed in the
execution proceedings which is not the case in the present
Appeals. They contend that the impugned order appoints a
receiver which is not a final order in the execution
proceedings. We do not find this distinction material for the
position of law regarding Section 36 of the Act of 1996. The
Division Bench has categorically held that adjudication of the
proceedings under Section 36 is under the Act of 1996 and
not under the Code of Civil Procedure. There is thus no
warrant to distinguish between interim orders and final
orders passed in the execution of the arbitral award.”
36. In Canara Bank vs. N. G. Subbaraya Setty and another
(supra) relied upon by Mr Seervai on behalf of the appellants,
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the Hon’ble Supreme Court has explained that the general
rule qua res judicata is that all issues that arise directly and
substantially in the former suit or proceeding between the
same parties are res judicata in subsequent suit or proceeding
between the same parties and that these would include issues
of fact, mixed question of fact and law, and issues of law.
37. However, the Hon’ble Supreme Court explained that to
the above general proposition of law, there are certain
exceptions, one of the exceptions being that an issue of law
which arises between the same parties in a subsequent suit or
proceeding is not res judicata if, by an erroneous decision
given on a statutory prohibition in the former suit or
proceeding, the statutory prohibition is not given effect to –
This is for the reason that in such cases, the rights of the
parties are not the only matter for consideration (as is the
case of an erroneous interpretation of a statute inter partes),
as the public policy contained in the statutory prohibition
cannot be set at nought. The second exception would be when
a competent authority alters the law itself since the earlier
decision may have attained finality.
38. Neither any of the above exceptions nor, for that matter,
the other exceptions referred to in Canara Bank vs. N. G.
Subbaraya Setty and another (supra) apply in this matter. We
find nothing erroneous in the judgment and order dated 9
August 2019, whether on facts or issues of law relating to the
jurisdiction of the Court. No statutory prohibition was
ignored, and this is also not a case where the competent
legislature or, for that matter, the Hon’ble Supreme Court has
altered the legal position with or without any retrospective
effect since the earlier decision. Instead, as will be noticed
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hereafter, the view taken in Kandla Export Corporation
(supra), which was relied upon in the judgment and order
dated 9 August 2019, has been subsequently reiterated and
followed in BGS SGS SOMA JV (supra) and Government of
India vs. Vedanta Limited and others (supra).
39. Thus, we are satisfied that the matter of maintainability
of appeals against judgments and orders made in proceedings
for execution or enforcement of arbitral awards was directly
and substantially in issue in the former proceedings, which
came to be disposed of by judgment and order dated 9 August
2019. It is precisely the very same issue that is directly and
substantially in issue in the present proceedings. Therefore, all
the parameters necessary to attract the doctrine of res
judicata, or in any event, the principles analogous to res
judicata, are fully satisfied in these matters. None of the
exceptions in Canara Bank vs. N. G. Subbaraya Setty and
another (supra) apply. Based upon all these factors, we hold
that the judgment and order dated 9 August 2019 in the
former proceedings is sufficient to uphold the first objection to
the maintainability of these appeals raised by and on behalf of
the respondents.
THE LAW OF THE CASE DOCTRINE
40. The “law of the case doctrine” would also persuade us to
reach the same conclusion. Though no arguments were
advanced on the law of the case doctrine, we refer to the
decision of the Coordinate Bench in Commissioner of Income
Tax vs. V. M. Salgaonkar Brothers Private Limited23. There,
23
Tax Appeal No.72 of 2015
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reference was made to the Black’s Law Dictionary24 to explain
this doctrine, which means that a decision rendered in a
former appeal of a case is binding in a later appeal of the
same case. Reference was also made to Messenger v.
Anderson25, in which Justice Holmes observes that in the
absence of statute, the phrase “law of the case,” as applied to
“the effect of previous orders on the later action of the court
rendering them in the same case,” merely expresses the
practice of courts generally refusing to reopen what has been
decided. It is not a limit to their power, though.
41. The law-of-the-case doctrine is said to come in at least
two forms. One form, also called the mandate rule, forestalls
relitigating in the trial court of matters explicitly or implicitly
decided by an early appellate decision in the same case. Once
an appellate court decides an issue, then it stands settled in
further proceedings in the trial court and controls the case.
The other form generally binds a court to its own earlier
ruling in the same case–in the absence of an intervening
ruling by a higher court on the same issue. This doctrine
wants the courts to “display disciplined self-consistency”
throughout the case26. It distinguishes itself from res judicata
(for instance, Section 11 of CPC) and ‘issue estoppel’ (as seen
in Order 2, Rule 2 of CPC), which are much more rigid27.
42. To put this doctrine in perspective, the interpretative
intricacies in understanding a precedent differ from those
involved in understanding the law of the case. A precedent
24
9th Edn.
25
225 U.S. 436, 444 (1912)
26
The Law of Judicial Precedent, Bryan A. Garner et al., Thomson Reuters (2016), p.
442
27
State of Kerala v. K. K. Mathai, AIR 2018 Kerala 18 (DB)
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binds to the extent the holding accords with the facts on hand.
On the other hand, the law of the case fetters a later Bench in
the same case from taking a contrary stand to that taken
earlier by the previous Bench. Of course, this constraint flows
down to the lower judicial echelons or applies to coordinate
Benches, but not appellate or higher fora28.
43. Applying the law of the case doctrine as well, we hold
that these appeals are not maintainable given the judgment
and order dated 9 August 2019 in Commercial Appeal (L)
No.109 of 2019 and connected appeals. Since no arguments
were advanced on this law of the case doctrine, we clarify that
the invocation of this doctrine should not be taken as the basis
for deciding the issue of maintainability of these appeals. Our
reasoning rests on the principle of res judicata or principles
analogous to res judicata upon which the counsel advanced
exhaustive arguments.
INDEPENDENT OF RES JUDICATA, WHETHER THESE
APPEALS ARE MAINTAINABLE?
44. Even independent of the principle of res judicata, we are
satisfied that these appeals are not maintainable simply
because the proceedings for execution or enforcement of the
arbitral award were not proceedings under the CPC or the
CCA, but they were proceedings under the ACA. Accordingly,
the issue of appealability of orders, whether interim or final,
made in such proceedings for execution or enforcement of
arbitral awards would have to be determined by the
provisions of the ACA in general and Section 37 of the ACA in
these particular cases.
28
Ibid
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45. Mr Chidambaram and Mr Seervai, however, contended
that since an arbitral award had to be enforced “in the same
manner as if it were a decree of the Court”, the proceedings for
execution or enforcement of the arbitral awards were nothing
but proceedings for execution under Order XXI of CPC. Going
further, they contended that all provisions relating to appeals
as available under the CPC and the CCA would apply and
determine the appealability issue. Therefore, they contended
that the present appeals would be maintainable based upon
the provisions of Order XLIII of CPC and Section 13(1) &
13(1A) of the CCA. This contention, with the greatest respect,
is misconceived and has been repeatedly rejected by the
Hon’ble Supreme Court and this Court.
46. Section 35 of the Arbitration and Conciliation Act
imparts finality to arbitral awards. This section provides that
subject to this Part, i.e. Part I, an arbitral award shall be final
and binding on the parties and persons claiming under them,
respectively. Section 36 of the Arbitration and Conciliation Act
provides that where the time for making an application to set
aside the arbitral award under Section 34 has expired, then,
subject to the provisions of sub-section (2), such award shall
be enforced in accordance with the provisions of the Code of
Civil Procedure, 1908 (5 of 1908), in the same manner as if it
were a decree of the Court.
47. The expression “in the same manner as if it were a decree
of the Court” was interpreted and explained by the Hon’ble
Supreme Court in Paramjeet Singh Patheja vs. ICDS Ltd.29. The
Court held that an arbitral award is not a decree as defined
29
(2006) 13 SCC 322
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under Section 2(2) of the CPC. The Court held that the
expression “as if” in fact, shows the distinction between a
decree and an arbitral award. The expression “as if”
demonstrates that the arbitral award and the decree differ.
The legal fiction created by the expression “as if” is for the
limited purpose of facilitating the enforcement of an arbitral
award as if it were a decree. The legal fiction was not
intended to make the arbitral award a decree for all purposes
under all statutes, whether State or Central. The Court held
that a legal fiction should not be extended beyond its
legitimate field. As such, an award rendered under the
provisions of the Arbitration Act cannot be construed as a
“decree”.
48. Mr Seervai’s contention that the Respondents had
themselves styled their execution applications as “application
for execution under Order XXI, Rule 11(2) of the Code of Civil
Procedure (Rule 313 of the Bombay High Court (Original Side)
Rules)” does not convert the proceedings for enforcement of
an arbitral award under Section 36 to proceedings for
execution under Order XXI of the CPC. The titles that the
parties may provide are quite irrelevant. Such a title was
perhaps used because, as explained by various decisions of the
Hon’ble Supreme Court and this Court, the Arbitration Act
adopts the mechanism of execution from the CPC.
49. However, adopting the mechanism under the CPC does
not convert the execution or enforcement proceedings under
Section 36 of the Arbitration Act into proceedings under
Order XXI of the CPC. Therefore, even if Respondents 1 and 2
may have referred to the provisions of Order XXI of the CPC
or Rule 313 of the Bombay High Court (Original Side) Rules,
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that can make no difference to the character of the
enforcement proceedings under Section 36 of the Arbitration
Act.
JET AIRWAYS (SUPRA) PRECEDENT
50. In Jet Airways (supra), a Coordinate Bench of this Court
was precisely concerned with the issue of maintainability of
an appeal against an order, finally disposing of proceedings
for execution or enforcement of an arbitral award under
Section 36 of the Arbitration Act. The Coordinate Bench
accordingly framed the following three issues which arose for
their consideration:-
“A. Whether the proceedings under section 36 of the 1996
Act are proceedings under the Code of Civil Procedure, 1908?
B. Whether the provisions of clause 15 of the Letters Patent
are applicable to the impugned Judgment and Order and
whether applicability of clause 15 has been impliedly excluded
by section 37 of the 1996 Act or by the amendment of section
2(2), 47 by Act 104 of 1976 amending the Code?
C. Whether the Judgment of Supreme Court in the case of
Fuerst Day Lawson (supra) is an authority which is applicable
only in respect of a foreign award covered by Part II of the 1996
Act or whether the ratio of the said Judgment is a binding
precedent even in respect of proceedings under part I of the
1996 Act or the same is obiter dicta?”
51. The Coordinate Bench in Jet Airways (supra), by
adverting to several binding precedents emanating from the
Hon’ble Supreme Court, held that the execution/enforcement
proceedings were proceedings under Section 36 of the
Arbitration Act and not proceedings for execution under
Section 47 or Order XXI of the CPC. The Coordinate Bench
also held that the appealability issue would be governed by
Section 37 of the ACA, a special enactment that would prevail
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over the CPC, which was only a general enactment. Similarly,
the Coordinate Bench also held that clause 15 of the Letters
Patent was also impliedly excluded by the special provisions of
the ACA. Finally, the Coordinate Bench held that the Supreme
Court’s decision in Fuerst Day Lawson Limited (supra)
conclusively determined the question of maintainability and
the observations in paragraphs 70 to 73 constitute a binding
precedent even in respect of maintainability of an appeal
against an order passed in proceedings arising out of a
domestic award under Part I of the ACA.
KANDLA (SUPRA) PRECEDENT
52. Kandla (supra) is the lead authority for the proposition
that the issue of appealability of any orders relating to
proceedings under the ACA is to be decided by reference to
the ACA itself, which is an exhaustive and self-contained code
and not by reference to the provisions of the CPC or the CCA.
Only in so far as the forum of appeal is concerned would it be
permissible to examine and apply the provisions of CPC and
the CCA, but not to determine the appealability issue.
53. In Kandla (supra), the issue which arose for
consideration of the Hon’ble Supreme Court was whether any
order made in proceedings for execution of a foreign arbitral
award under Section 48 of the Arbitration Act was appealable
under the CPC or the Commercial Courts Act, even though,
Section 50 of the Arbitration Act did not provide for any
appeal against such order. The Kandla Export Corporation,
like the appellants in the present case, had argued that such
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an appeal was maintainable under the provisions of Section
13 of the Commercial Courts Act. Arguments almost similar
to, if not identical to, those made by Mr. Chidambaram and
Mr. Seervai in these appeals were advanced, supporting the
maintainability of the appeal. However, the Hon’ble Supreme
Court, upon a detailed consideration of all such contentions,
held that the appeal was not maintainable.
54. The Court held that Section 13(1) of the Commercial
Courts Act is in two parts. The central provision provides for
appeals from judgments, orders and decrees of the
Commercial Division of the High Court. The proviso for this
central provision carves out an exception by stating that an
appeal shall lie from such orders passed by the Commercial
Division of the High Court that are enumerated explicitly
under Order XLIII of the Code of Civil Procedure Code, 1908
and Section 37 of the Arbitration and Conciliation Act, 1966.
The Court, therefore, held: It will at once be noticed that orders
that are not specifically enumerated under Order 43 CPC would,
therefore, not be appealable, and appeals that are mentioned in
Section 37 of the Arbitration Act alone are appeals that can be
made to the Commercial Appellate Division of a High Court.
55. Kandla Export Corporation’s contention that Section 50
of the ACA does not find any mention in the proviso to
Section 13(1) of the CCA and, therefore, notwithstanding that
an appeal would not lie under Section 50 of the ACA, it would
lie under Section 13(1) of the CCA was rejected by the
Hon’ble Supreme Court by adverting to its decision in Fuerst
Day Lawson Limited (supra). The Court referred to the
principle laid down in sub-section (vii), in paragraph 36,
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which reads thus: (SCC p.350, para 36) “36. …(vii) The
exception to the aforementioned rule is where the special Act sets
out a self-contained code and in that event the applicability of
the general law procedure would be impliedly excluded. The
express provision need not refer to or use the words “letters
patent” but if on a reading of the provision it is clear that all
further appeals are barred then even a letters patent appeal
would be barred.”
56. Kandla Export Corporation’s contention that the
expression “and from no others” which was conspicuous by its
absence in Section 50 of the ACA, was also rejected by the
Hon’ble Supreme Court after referring to the observations in
paragraphs 60 and 61 of Fuerst Day Lawson Limited (supra).
The Court observed (in paragraph 20): Given the judgment of
this Court in Fuerst Day Lawson, which Parliament is presumed
to know when it enacted the Arbitration Amendment Act, 2015,
and given the fact that no change was made in Section 50 of the
Arbitration Act when the Commercial Courts Act was brought
into force, it is clear that Section 50 is a provision contained in a
self-contained code on matters pertaining to arbitration, and
which is exhaustive in nature. It carries the negative import
mentioned in paragraph 89 of Fuerst Day Lawson that appeals
which are not mentioned therein, are not permissible. This being
the case, it is clear that Section 13(1) of the Commercial Courts
Act, being a general provision vis-à-vis arbitration relating to
appeals arising out of commercial disputes, would obviously not
apply to cases covered by Section 50 of the Arbitration Act.”
57. The Court also rejected Kandla Export Corporation’s
contention that while Section 37 of the ACA was expressly
included in the proviso to Section 13(1) of the CCA, no
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specific reference was made to Section 50 of the Arbitration
and Conciliation Act, 1996, and this factor suggests that the
legislature intended to restrict the proviso to Section 13(1) to
matters which concerned Section 37 of the ACA. This is
evident from the observations in paragraphs 21 and 22,
extracts from which read: One answer is that this was done ex
abundanti cautela. Another answer may be that as Section 37
itself was amended by the Arbitration Amendment Act, 2015,
which came into force on the same day as the Commercial
Courts Act, Parliament thought, in its wisdom, that it was
necessary to emphasise that the amended Section 37 would have
precedence over the general provision contained in Section 13(1)
of the Commercial Courts Act. Incidentally, the amendment of
2015 introduced one more category into the category of
appealable orders in the Arbitration Act, namely, a category
where an order is made under Section 8 refusing to refer parties
to arbitration. Parliament may have found it necessary to
emphasise the fact that an order referring parties to arbitration
under Section 8 is not appealable under Section 37(1)(a) and
would, therefore, not be appealable under Section 13(1) of the
Commercial Courts Act. Whatever may be the ultimate reason
for including Section 37 of the Arbitration Act in the proviso to
Section 13(1), the ratio decidendi of the judgment in Fuerst Day
Lawson would apply, and this being so, appeals filed under
Section 50 of the Arbitration Act would have to follow the drill
of Section 50 alone.
58. The Court also explained that in all arbitration cases of
enforcement of foreign awards, Section 50 alone provides an
appeal. Having provided for an appeal, the forum of appeal is
left “to the Court authorised by law to hear appeals from such
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orders”. Section 50 properly read would, therefore, mean that if
an appeal lies under the said provision, then alone would
Section 13(1) of the Commercial Courts Act be attracted as
laying down the forum which will hear and decide such an
appeal.”
59. In Kandla (supra), the Hon’ble Supreme Court relied
upon Arun Dev Upadhyaya vs. Integrated Sales Service Ltd. 30,
in which it was held that the issue of maintainability of an
appeal has to be decided by reference to the provisions of the
ACA and reference could be made to Section 13 of the CCA or
Letters Patent only for determining the forum of such appeal.
The Court held that neither Section 13 nor the Letters Patent
could have been invoked if Section 50 of the ACA did not
provide for an appeal.
60. The Court held that the matter can be viewed from a
slightly different angle. Given both statutes’ objects,
arbitration is meant to be a speedy resolution of disputes
between parties. Equally, enforcement of foreign awards
should take place as soon as possible if India is to remain an
equal partner, commercially speaking, in the international
community. The raison d’être for enacting the CCA is that
commercial disputes involving high amounts of money should
be speedily decided. Given the objects of both the enactments,
if an additional appeal were to be provided when Section 50
does away with an appeal to enforce expeditiously foreign
awards, that would amount to turning the Arbitration Act and
the Commercial Courts Act on their heads.
30
(2016) 9 SCC 524
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61. The Court held that Section 13(1) of the CCA must be
construed in accordance with the object sought to be achieved
by the Act. Therefore, any construction of Section 13 of the
CCA, which would lead to further delay instead of expeditious
enforcement of the foreign award, must be eschewed. Even on
applying the doctrine of harmonious construction of both
statutes, the Court held that it was clear that they are best
harmonised by giving effect to the special statute, i.e. the
ACA, vis-à-vis the more general statute, the CCA, being left to
operate in spheres other than arbitration. Thus, Kandla Export
Corporation (supra) provides a complete answer to almost all
the contentions raised by Mr P. Chidambaram and Mr Seervai
in support of the maintainability of these appeals.
62. Mr. Seervai, in rejoinder, attempted to distinguish
Kandla (supra) based on the observations in paragraphs 60
and 61 of the Fuerst Day Lawson Limited (supra) to the effect
that the provisions, scope and scheme of Part I (which contain
Sections 36 and 37) and Part II (which contain Sections 48 to
50) of Arbitration Act were entirely different and operated
independently in their respective fields.
63. The distinction now sought to be made by Mr Seervai,
is, with respect is, entirely misconceived. These differences in
Part I and II were pointed out in answer to the contention that
the expression “and from no others”, which finds its place in
Section 37 of the ACA but was conspicuous by its absence in
Section 50 of the ACA. In any event, Kandla (supra), after
considering precisely paragraphs 60 and 61 of Fuerst Day
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Lawson Limited (supra), rejected the argument very similar to
what is now made by Mr Seervai.
64. In fact, Kandla (Supra) expressly refers to Section 37 of
the ACA and holds that no appeals other than those
enumerated under Section 37 would lie by resort to the
provisions of the CCA or the Letters Patent. The Court holds
that the same principle would apply in the context of Section
50 of the ACA even though Section 50, after enumerating the
orders against which appeals would lie, does not use the
expression “and from no others”.
65. In any event, on a harmonious construction of the
decisions in Kandla (supra) and Fuerst Day Lawson Limited
(supra), it is apparent that the appeals against interim or final
orders in proceedings for execution or enforcement of
domestic awards will have to follow the drill of Section 37 of
the ACA. This means that if Section 37 provides for no appeal
against an order disposing of proceedings for execution or
enforcement of an award under Section 36 of the ACA, then
no such appeal will lie by reference to the CCA or the CPC.
The two decisions make it clear that the issue of
maintainability must be determined under the ACA, which is
an exhaustive self-contained code. Only the forum issue can
be decided by referencing the CCA or the CPC.
OTHER PRECEDENTS
66. In BGS SGS SOMA JV (supra), the Hon’ble Supreme
Court explained that the interplay between Section 37 of the
ACA and Section 13 of the CCA was laid down in some detail
in the Kandla (supra) judgment. The Court held that the
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precise question that arose in Kandla (supra) was as to
whether an appeal, which was not maintainable under Section
50 of the ACA, was nonetheless maintainable under Section
13(1) of the CCA. In this context, after setting out various
provisions of the CCA and the ACA, the Court held that there
was no independent right of appeal under Section 13(1) of
the CCA, which merely provides a forum for filing appeals.
The parameters of Section 37 of the ACA alone must be
examined to determine whether the appeals were
maintainable. The Court then referred to Section 37(1), which
had made it clear that the appeal shall only lie from the orders
set out in sub-clauses (a), (b) and (c) and from no others.
67. The argument in the context of the proviso to Section
13(1A) of the Commercial Courts Act and Order XLIII of CPC
was also considered in BGS SGS SOMA JV (supra) in
paragraph 14. The Court held that interestingly, under the
proviso to Section 13(1A) of the CCA, Order XLIII of CPC is
also mentioned. After quoting Order XLIII Rule 1(a) the Court
held that this provision was conspicuous by its absence in
Section 37 of the ACA, which alone can be looked at for the
purpose of filing appeals against orders setting aside or
refusing to set aside awards under Section 34.
68. The Court also held that what was missed by the
judgment impugned before the Hon’ble Supreme Court was
the words “under Section 34”. Thus, the refusal to set aside an
arbitral award must be under Section 34, i.e. after grounds set
out in Section 34 have been applied to the arbitral award in
question and after the Court has turned down such grounds.
Accordingly, the Court held that an order by which a Section
34 application was returned to be presented before an
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appropriate Court or to a proper Court would not amount to
an order “refusing to set aside an arbitral award under Section
34” and consequently not appealable under either Section 37
of the Arbitration Act. Therefore, by referencing Section 13 or
13(1A) of the CCA, such an order could not be held
appealable.
69. In Noy Vallesina Engineering Spa vs. Jindal Drugs
Limited and others31, the Hon’ble Supreme Court was
concerned with partial and final foreign awards. These awards
were sought to be enforced by invoking Sections 47 and 48 of
the ACA. The Respondent (Jindal) objected to the
enforcement proceedings. The learned Single Judge of this
Court substantially upheld the awards and proceeded to its
enforcement by judgment dated 5 June 2006, simultaneously
rejecting the challenge to the enforcement laid out by Jindal.
Both parties appealed to the Division Bench: Jindal, on the
challenge to the order dismissing its objection to the
enforcement (Appeal No.492 of 2006), and NV Engineering,
as to the part of the order of the Single Judge, refusing to
enforce a part of the award (Appeal No.740 of 2006).
70. The Hon’ble Supreme Court referred to its decision in
Fuerst Day Lawson Limited (supra), where it had to interpret
Section 50 of the ACA, which provided a restrictive category
of appealable subject matters and prohibited appeals on other
issues. The Court held that the category of appealable matters
could not be enlarged by referring to the Letters Patent. The
Court noted that the observations in paragraph 10 of Fuerst
Day Lawson Limited (supra) were quoted with approval in
31
(2021) 1 SCC 382
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Union of India vs. Simplex Infrastructures Ltd. 32, and it was
held that after this decision, there was no scope to contend
that the remedy of Letters Patent appeal was available. The
Court held that this legal position was also restated in Arun
Dev Upadhyaya (supra). The Court also referred to Kandla
(supra). Finally, it held that given the categorical judgments of
the Supreme Court, Jindal’s appeal to the Division Bench
(Appeal No.492 of 2006) challenging the order rejecting its
objection to enforcement of the award was not maintainable.
71. Finally, even in Government of India vs. Vedanta Limited
and others (supra), the Hon’ble Supreme Court held that
applications under Sections 47 and 49 for enforcement of
foreign awards are substantive Petitions filed under the ACA.
The Court held that it was well-settled that the ACA was a
self-contained code. The application under Section 47 of the
ACA was not an application filed under any of the provisions
of Order XXI of CPC, 1908. The application was filed before
the appropriate High Court for enforcement, which would
take recourse to the provisions of Order XXI of CPC only for
the purposes of execution of the foreign award as a deemed
decree. Therefore, the bar contending Section 5 of the
Limitation Act, which excludes an application filed under any
of the provisions of Order XXI of CPC, would not apply to a
substantive petition filed under the ACA. Consequently, it was
held that an application for condonation of delay under
Section 5 of the Limitation Act would be maintainable to
consider the issue of condonation of delay in applying for
enforcement of a foreign award if required in the facts and
circumstances of the case.
32
(2017) 14 SCC 225
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72. Thus, considering the weight of the authorities of the
Hon’ble Supreme Court and this Court on the subject, we
cannot accept that the proceedings for enforcement of the
arbitral award filed by the first and second respondent in this
matter could be regarded as proceedings under Order XXI of
CPC or any of the provisions of CCA. Since they were not
proceedings under the CPC or the CCA, the impugned order,
whether styled as a judgment or an order, cannot be regarded
as one made under the CPC or the CCA. Accordingly, relying
upon the provisions of the CPC or the CCA, the objection to
the maintainability of these appeals cannot be rejected but
will still have to be sustained.
73. Thus, even independent of our finding that the
judgment and order dated 9 August 2019 in Commercial
Appeal (L) No.109 of 2019 and connected matters operates as
res judicata to the issue of maintainability of these appeals, we
are satisfied that these appeals are not maintainable and are
required to be dismissed as not maintainable.
SECTION 13(1A) CCA ARGUMENT
74. The arguments based upon the interpretation of the
provisions of Section 13 or 13 (1A) of the CCA or Order XLIII
of the CPC fade into irrelevancy once it is clear that the
maintainability of these appeals has to be adjudged by
following the drill of Section 37 of the ACA. The provisions of
the ACA determine the issue of appealability in such matters.
The provisions of the CCA, or the CPC, can be examined only
to determine the forum of appeal. The latter two enactments
do not decide the substantive maintainability of the appeal.
Thus, if the appeal is not maintainable under the ACA, then
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there is no question of referring to the forum provided by the
CCA or the CPC and then holding that the appeals are
nevertheless maintainable.
75. Similarly, the decisions in D & H India Ltd. (supra),
Hubtown Limited (supra) and Sigmarq Technologies Pvt. Ltd.
and others (supra) would not apply given the legal position
that the issue of maintainability of these appeals must be
determined by reference to the provisions of ACA and not the
CCA or the CPC. In any event, another Coordinate Bench of
this Court, in the case of Shailendra Bhadauria and others
(supra), has expressly held that “the earlier view in Hubtown
Limited (supra) and Sigmarq Technologies (supra) will have to
give way and all the more after the judgments of the Hon’ble
Supreme Court delivered in the case of Fuerst Day Lawson
Limited v. Jindal Exports Limited and the authoritative and
binding pronouncement in the case of Kandla Export
Corporation (supra). The statute has to confer a right of appeal.
That has to be conferred in clear words. We cannot, as suggested
by Mr Andhyarujina, by an interpretative process carve out a
right of appeal, when the law is not creating it.”
76. Thus, the Coordinate Bench, in Shailendra Bhadauria
and others (supra) upheld that the preliminary objection
regarding maintainability of appeals against an order made by
the learned Single Judge by this Court in an application for
execution/enforcement of an arbitral award, inter alia on the
ground that such an appeal was not maintainable under
Section 37 of the ACA, and therefore, by tortious
interpretation of the provisions of the CCA or the CPC, right of
appeal against such orders could not be carved out by the
Court.
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77. In Bank of India v. M/s Maruti Civil Works 33, another
coordinate Bench of this Court distinguished D & H India Ltd.
(supra) and referred to a later decision of the Delhi High
Court in Delhi Chemical and Pharmaceutical Works Pvt. Ltd. v.
Himgiri Realtors Pvt Ltd.34 which had doubted the correctness
of the view taken in D & H India Ltd. (supra). The Court held
that an appeal under Section 13(1A) of the CCA would lie
only against the judgment and orders enumerated or enlisted
under Order XLIII of the CPC.
78. For all the above reasons, we hold that these appeals
cannot be held to be maintainable by reference to sections 13
or 13(1A) of the CCA read with the provisions in Order XVIII
of the CPC.
ALTERNATE ARGUMENT BASED ON ORDER XLIII RULE 1A
(2) CPC
79. Mr P. Chidambaram’s ultimate but without prejudice
submission that should this Court, for any reason, hold that
these appeals are not maintainable, then the appellants must
be granted the liberty to approach the Court, which passed
the order dated 22 February 2018 with a request to such
Court to modify/revise its order on the ground that the
compromise terms were contrary to law. For this, Mr P.
Chidambaram relied upon the provisions of Order XLIII Rule 1
A (2) of CPC and the decisions of the Hon’ble Supreme Court
in Banwari Lal (supra) and Vipan Aggarwal and another
(supra).
33
Appeal From Order No.362 of 2021 decided on 15 December 2023.
34
2021 SCC Online Del 3606
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80. Since we have held that the proceedings for
enforcement of the arbitral award before the learned Single
Judge were not proceedings under Order XXI or any other
provisions of CPC, there is no question of granting the liberty
as prayed for. Banwari Lal (supra) and Vipan Aggarwal and
another (supra) are cases concerning proceedings under the
CPC. In the context of such proceedings, the two decisions
hold that parties aggrieved by a compromise decree had a
right to avail either the remedy of appeal in terms of Order
XLIII Rule 1A of CPC or to file an application before the Court
which made the compromise decree given the proviso along
with Explanation to Rule 3 of Order XXIII of CPC. These
decisions do not even remotely deal with proceedings for the
enforcement of arbitral awards, and the consent orders
compromise orders made in such proceedings. Therefore, the
liberty to move the Court which made the order dated 22
February 2018, i.e., the learned Single Judge of this Court,
cannot be granted as prayed for.
COSTS AND CONCLUSIONS
81. In these matters, we cannot but resist noting that the
disputes between the parties culminated in a reference to the
Arbitral Tribunal. A consent award dated 14 July 2014
disposed of the arbitral proceedings. Since the appellants
failed to honour their undertakings and pay the awarded
amounts, the first and second Respondents were forced to file
proceedings to enforce the arbitral/consent award dated 14
July 2014. Even these execution/enforcement proceedings
were disposed of by consent order dated 22 February 2018,
which gave further concessions to the appellants. Instead of
honouring the consent order dated 22 February 2018, the
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appellants instituted these appeals, which we now find were
not maintainable.
82. Thus, the appellants are determined not to pay the first
and second Respondents under the consent award dated 14
July 2014 and the consent order dated 22 February 2018.
Considerable judicial time has been spent dealing with almost
identical arguments on the issue of maintainability in
Commercial Appeal (L) No.109 of 2019 and connected
matters and the present appeals. This is at the cost of several
non-commercial matters, which cry for scarce judicial time
and commercial matters, which must be expedited given the
legislative intent of both the Commercial Courts Act and the
Arbitration Act. Even though all the arguing counsel presented
arguments with clinical precision and admirable restraint,
considerable judicial time of the Single Judge and two
Division Benches was consumed. For all this, the appellants
must pay costs not only to the first and second Respondents
but also to the Maharashtra State Legal Services Authority,
which provides legal aid to those who cannot afford the
luxury of engaging advocates to prosecute their causes.
83. Accordingly, we dismiss these appeals as not
maintainable. The appellants are directed to pay consolidated
costs of Rs.20,00,000/-, out of which Rs 10,00,000/- to be
shared by the first and second Respondents, and the balance
Rs 10,00,000/- by the Maharashtra State Legal Services
Authority. These costs must be paid within four weeks from
today, and proof of payment must be filed in the Registry.
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84. These appeals and interim applications therein, if any,
are dismissed with costs as indicated above. Interim orders, if
any are also vacated.
(Jitendra Jain, J) (M. S. Sonak, J)
Signed by: Pradnya Bhogale
Designation: PA To Honourable Judge Page 42 of 42
Date: 14/12/2024 14:51:54